In April 2025, PancakeSwap rolled out Tokenomics 3.0, scrapping the veCAKE locking model and cutting daily CAKE emissions from about 40,000 to 22,250 tokens. Tokenomics refers to the rules governing how a crypto project’s tokens are issued, burned, or distributed to keep value steady or rising over time.
CAKE Burns Drive Deflationary Shift
This move flipped the script: instead of inflating supply, the platform burned more CAKE than it minted, shrinking total circulating tokens from 380 million at the year’s start to roughly 350 million now, a net burn of 8.19%. Burns work by permanently removing tokens from existence, much like shredding excess cash to fight inflation.
The proposal argued a 400 million max supply provides enough buffer for growth. It is backed by a 3.5 million CAKE Ecosystem Growth Fund to cover needs without fresh emissions. Community votes sealed the deal, adjusting the cap immediately and thanking participants for their debate.
🗳️ The CAKE Max Supply Reduction Proposal has passed!
✅ Max supply has now been adjusted to 400M CAKE
🙏Thank you to our community for the thoughtful discussion and votes
With CAKE’s max supply reduced to 400M, we’re reinforcing long-term sustainability and a… https://t.co/9wzsGbcbOl
— PancakeSwap (@PancakeSwap) January 19, 2026
This caps a trend where top DeFi platforms prioritize scarcity to boost token value, mirroring Bitcoin’s halving events that cut new supply. PancakeSwap’s trading volume topped $500 billion in 2025, with 15% of fees now fueling burns. A real-world parallel: think of it as a retailer buying back shares to reward loyal holders. This is automated via smart contracts on BNB Chain.
More About PancakeSwap
PancakeSwap boasts superior liquidity provider (LP) rewards compared to rivals. With its top three core trading pairs racking up $67 billion in total volume since launch, fueled by over 2 million active users. LP rewards refer to yields earned by pairing up two tokens, like CAKE/BNB or stablecoin duos, in a pool that powers automated swaps on the platform. Providers collect a cut of trading fees plus bonus token emissions.
LP rewards are just better on PancakeSwap 🥞
Since launch, the top 3 core pairs have already seen $67B in total volume across the protocol, powered by 2M+ users.
Here are the top pairs on Base and their APRs when you LP 💦 pic.twitter.com/1MP087Ogip
— PancakeSwap (@PancakeSwap) January 20, 2026
For instance, top Base pairs such as those involving popular memecoins or ETH variants now offer APRs often exceeding 20-50%. This far outpaces fragmented competitors, as the protocol funnels rewards efficiently to early participants.

